Lamar is set to establish a reorder policy for his remote snack bar located on Tahiti.He sells 8 cases of soda per day and has a lead-time for delivery of one week.Occasionally,bad weather or mechanical difficulty can delay his delivery by up to four days.At what point should Lamar reorder (how many cases on hand)if he wants to also compensate for unexpected order delays?
A)56 cases
B)88 cases
C)100 cases
D)There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

Since Lamar has a lead time of one week and there could be a delay of up to four more days, he should have enough inventory to cover at least 11 days of sales (7 days lead time + 4 days possible delay). 8 cases of soda are sold per day, so Lamar needs to reorder when he has 88 cases on hand (8 cases/day x 11 days). Therefore, the best choice is B) 88 cases.

Lamar Is Set to Establish a Reorder Policy for His